SINGAPORE, Jan 29 (Reuters) - Have more babies to build the
ranks of Singaporeans and get set for a construction boom but
accept heavier congestion and more foreign workers as the
crowded Asian city-state grows into a global centre with 30
percent more people.

That is the vision for Singapore set out on Tuesday by the
long-ruling government, just days after it lost a seat in
parliament in a by-election defeat that reflected rising
discontent over soaring costs and an influx of immigrants.

The white paper on population, released after months of
public consultation, seeks to address concern about affordable
housing, good jobs and quality of life while trying to boost a
chronically low birthrate as the workforce ages rapidly in the
wealthy country of 5.3 million people.

By 2030, the population could grow to between 6.5 million
and 6.9 million, the government said, stressing the importance
of keeping Singaporeans as "the core of our society", supporting
a dynamic economy and meeting infrastructure needs.

"Many Asian cities are modernising rapidly, and catching up
on us," it said. "Singapore must continue to develop and upgrade
to remain a key node in the network of global cities, a vibrant
place where jobs and opportunities are created."

With a stern, technocratic approach, the People's Action
Party (PAP) has built up Singapore from a post-colonial outpost
into a major business hub during its five decades in power.

Since suffering its worst election showing in history in
2011, the government has sought more input from citizens and has
ramped up social spending, restricted lower-skilled foreign
workers and taken steps to cool property prices.

But Saturday's by-election defeat may be a harbinger of the
public reaction to its latest plan for the economy and society.

"This will be very negatively perceived and ultimately I
believe have to be reworked to be politically viable," said
Bridget Welsh, an assistant professor of political science at
Singapore Management University.

"Singaporeans feel a sense of betrayal with the larger share
of the population comprised of foreigners and a dilution of
Singaporean identity."

Immigrants now make up nearly 40 percent of the population,
up from about 25 percent in 2000, fuelling concern about the
cost of living, overcrowding and threats from cheaper labour on
an island with less than half the area of London.

Singapore, with a land mass of 714 square km, is already
more densely populated than Hong Kong, which has 7.1 million
people squeezed into an area of 1,104 square km.

THE RIGHT BALANCE

While the overall number of foreigners is set to rise, the
government projections point to an even tighter immigration
policy, Credit Suisse economist Michael Wan said, with the data
showing the inflow would have to slow to 45,000 to 55,000 a
year, down from more than 100,000 a year between 2006 and 2012.

The tighter curbs on foreign workers would dampen economic
growth and less productive companies would "start to get weeded
out as restructuring bites", he said.

Singapore's trade-driven economy has been in the doldrums
since last year, hurt by slowing demand for electronics that has
been exacerbated by the strong Singapore dollar and measures
making it harder for companies to hire low-wage foreign workers.

Up to 2020, the white paper said, the economy will expand at
an average rate of 3-5 percent if productivity can be raised by
2-3 percent each year and overall workforce growth stays at 1-2
percent. But economic growth is more likely to average 3-4
percent over the whole period, it said.

"If we do too little to address the demographic challenge,
we risk becoming a steadily greying society, losing vitality and
verve, with our young people leaving for opportunities
elsewhere," the government said.

"But if we take in too many immigrants and foreign workers,
we will weaken our national identity and sense of belonging, and
feel crowded out of our own home."

The growth in population will involve persuading citizens to
raise their fertility rate from 1.2 babies per woman to closer
to the replacement level of 2.1, while handing out citizenship
to more foreign-born professionals, it said.

Construction, public transport, property and healthcare are
sectors most likely to benefit from the government's initiatives
and a rising population, brokerage DBS Vickers said in a report
in mid-January on its expectations for the white paper.

"Policy makers are playing a catch up game to increase
housing supply over the next few years," it said.

Beyond raising stamp duties to make it more expensive for
foreigners to buy property, the government is selling more land
for development and accelerating construction of public housing.

Other measures include higher spending on housing grants,
subsidised childcare and cash gifts for newborns as part of an
enhanced marriage and parenthood package called "Hey Baby".

"Will Singapore sink? I think Singaporeans will adapt
quickly," Lim Boh Keow, 51, who runs a dumpling stall in a food
court. "There is no choice. We citizens don't get the chance to
give our views. Even the first train every morning is packed."
(Additional reporting by Jion Chun Teo and Saeed Azhar; Editing
by Robert Birsel)